One of your main goals in your estate plan may be to set aside some of your assets so that your loved ones are financially taken care of when you are no longer around. So last thing you may want is for your personal troubles to affect your beneficiaries in any way. More specifically, you do not want your legal issues to ruin your beneficiaries’ chances of receiving their fair share of your assets. Read on to discover how an irrevocable trust may protect your assets in a lawsuit and how a seasoned New York City trusts attorney at Zimmet Law Group, P.C. can help you establish one.
Will my irrevocable trust protect my assets if I am facing a lawsuit?
If an individual files a civil lawsuit against you, they are likely seeking to recover financial compensation for their claimed damages. And if they are successful, the court may order you to pay compensatory damages so to punish you for your conduct and to deter you from engaging in similar conduct again. This may mean giving up some of your hard-earned assets to hand over to the plaintiff; assets that you intended to hand over to your beneficiaries instead.
Rest assured, an irrevocable trust is one estate planning tool that may work to protect your assets in the event of a lawsuit. This is because, with this type of trust, you are essentially relinquishing your ownership over the given assets. So since you no longer legally own these assets, they cannot be legally taken away after a court order. Overall, this means that your beneficiaries will receive their promised inheritances when the time comes.
What are the other functions of an irrevocable trust?
Protecting your assets from a lawsuit is simply a fringe benefit of establishing an irrevocable trust. Without further ado, below are some of its other impressive functions:
- It may allow you to still receive income from the assets that you relinquish your ownership over.
- It may allow you to take advantage of the estate tax exemption by removing taxable assets from your estate.
- It may allow you to prevent your beneficiaries from misusing your assets by appointing a reliable trustee to oversee them.
- It may allow you to decrease your beneficiaries’ properties while still allowing them to be eligible for government benefits (i.e., Social Security benefits, Medicaid benefits, etc).
- It may allow you to remove appreciable assets from your estate while still providing your beneficiaries with a stepped-up basis from valuing the assets for tax purposes.
You must not take any chances when it comes to establishing your estate plan. So please retain the services of a competent New York City estate planning attorney at Zimmet Law Group, P.C. as soon as you can.